Daimler posts strong earnings as demand for cars rebounds

FRANKFURT — Carmaker Daimler on Thursday posted forecast-beating third-quarter results, citing a faster than expected market recovery and strong business in September.

Third-quarter earnings before interest and tax reached 3.07 billion euros ($3.59 billion), Daimler said, beating the 2.14 billion Refinitiv forecast. It said it expected the positive momentum to continue in the fourth quarter, assuming there are no further coronavirus lockdowns.

The COVID-19 pandemic had led to a slump in sales, pushing the company to operating losses in the first and second quarters.

To counter losses, Daimler’s Mercedes-Benz has stopped building sedans in the United States to focus on more profitable SUVs, combined its fuel cell development with Volvo Trucks, and halted an automated development alliance with BMW BMWG.DE.

Earlier this month, Daimler said it will cut fixed costs, capex and research and development spending at Mercedes-Benz by more than 20% by 2025 as part of a strategy overhaul to take the brand further upmarket.

The move will see Mercedes-Benz, currently the world’s top selling premium car brand, turn its back on a decades-old strategy of chasing sales volume to focus on the industry’s most profitable segments: limousines and sport-utility vehicles.

Daimler said it expects to publish updated guidance for the full year when it publishes full results on Oct. 23.

Source: AutoBlog.com